House Report 111-166, Part 2 - 111th Congress (2009-2010) June 23, 2009, As Reported by the Armed Services Committee

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House Report 111-166 - NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2010
[House Report 111-166]
[From the U.S. Government Printing Office]
111th Congress Rept. 111-166
HOUSE OF REPRESENTATIVES
1st Session Part 2
======================================================================
NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2010
_______
June 23, 2009.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Skelton, from the Committee on Armed Services,
submitted the following
SUPPLEMENTAL REPORT
[To accompany H.R. 2647]
This supplemental report shows the cost estimate of the
Congressional Budget Office with respect to the bill (H.R.
2647), as reported, which was not included in part 1 of the
report submitted by the Committee on Armed Services on June 18,
2009 (H. Rept. 111-166, pt. 1).
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 22, 2009.
Hon. Ike Skelton,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2647, the National
Defense Authorization Act for Fiscal Year 2010.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Kent
Christensen.
Sincerely,
Douglas W. Elmendorf.
Enclosure.
H.R. 2647--National Defense Authorization Act for Fiscal Year 2010
Summary: H.R. 2647 would authorize appropriations totaling
$681 billion for fiscal year 2010 for the military functions of
the Department of Defense (DoD), for certain activities of the
Department of Energy (DOE), and for other purposes. That total
includes $130 billion for the cost of overseas contingency
operations, primarily in Iraq and Afghanistan. In addition,
H.R. 2647 would prescribe personnel strengths for each active-
duty and selected reserve component of the U.S. armed forces.
CBO estimates that appropriation of the authorized amounts
would result in outlays of $671 billion over the 2010-2014
period.
The bill also contains provisions that would both increase
and decrease costs of discretionary defense programs in future
years. Most of those provisions would affect force structure,
compensation, and benefits. In total, such provisions would
raise costs by an average of about $16 billion annually from
2011 to 2014, assuming appropriation of the necessary amounts.
The bill contains one provision that would have a
significant effect on direct spending. Section 422 would repeal
section 1002 of Public Law 110-417, the Duncan Hunter National
Defense Authorization Act for Fiscal Year 2009, which shifted 1
percent of military retirement payments scheduled to occur in
September of 2013 to October 2013. CBO estimates that repeal of
section 1002 would shift $43 million in outlays from fiscal
year 2014 to fiscal year 2013. That change would have no net
effect on budget authority or outlays over the 2010-2014 period
or the 2010-2019 period.
Enactment of the bill would not affect revenues.
H.R. 2647 contains both intergovernmental and private-
sector mandates as defined in the Unfunded Mandates Reform Act
(UMRA). CBO estimates that the costs of the intergovernmental
mandates would not exceed the threshold established in UMRA
($69 million in 2009, adjusted annually for inflation). CBO
cannot determine whether the costs to the private sector would
exceed the annual threshold ($139 million in 2009, adjusted
annually for inflation).
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 2647 is summarized in Table 1. Almost
all of the $681 billion that would be authorized by the bill is
for activities within budget function 050 (national defense).
Other costs--some occurring beyond 2010--fall within other
budget functions, including: authorizations of $168 million for
the Maritime Administration (function 400--transportation);
$134 million for the Armed Forces Retirement Home (function
600--income security); $24 million for the Naval Petroleum
Reserves (function 270--energy); and $4.5 million annually
through 2015 for the Sikes Act (function 300--natural resources
and environment, and function 050--national defense).
Basis of estimate: For this estimate, CBO assumes that H.R.
2647 will be enacted near the start of fiscal year 2010 and
that the authorized amounts will be appropriated.
SPENDING SUBJECT TO APPROPRIATION
The bill would specifically authorize appropriations
totaling $681 billion in 2010 (see Table 2). Of that amount,
$551.0 billion is for authorizations of regular (non-emergency)
appropriations--$534.1 billion for DoD, $16.5 billion for
atomic energy activities within DOE, and $0.3 billion for other
programs.
Compared to regular appropriations currently enacted for
2009, the 2010 level authorized for DoD would be an increase of
$20.7 billion (4.0 percent), while the level authorized for DOE
would be an increase of $0.6 billion (3.8 percent). The four
largest categories of DoD spending would receive increases as
follows: military personnel--$10.8 billion (8.6 percent);
operation and maintenance--$6.5 billion (3.6 percent);
procurement--$5.1 billion (5.0 percent), and research and
development--$0.1 billion (0.1 percent).
TABLE 1.--BUDGETARY IMPACT OF H.R. 2647, THE NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2010
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars 2010--
-----------------------------------------------------------------
2010 2011 2012 2013 2014 2010-2014
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION
Authorization of Regular Appropriations for
2010, primarily for the Departments of
Defense and Energy:
Authorization Level....................... 550,962 5 5 5 5 550,980
Estimated Outlays......................... 354,129 125,298 42,897 14,444 5,737 542,505
Authorization of Appropriations for 2010 for
Overseas Contingency Operations:
Authorization Level....................... 130,000 0 0 0 0 130,000
Estimated Outlays......................... 66,601 42,418 14,243 3,986 1,283 128,531
Total:
Authorization Level....................... 680,962 5 5 5 5 680,980
Estimated Outlays......................... 420,730 167,716 57,140 18,430 7,020 671,036
CHANGES IN DIRECT SPENDING
Estimated Budget Authority.................... 0 0 0 0 0 0
Estimated Outlays............................. 0 0 0 43 -43 0
----------------------------------------------------------------------------------------------------------------
Notes: The authorization levels in this table reflect amounts specifically authorized by the bill. The bill also
implicitly authorizes some activities in 2011 and future years; those authorizations are not included above
(but are shown in Table 3) because funding for those activities would be covered by specific authorizations in
future years.
Numbers may not add to totals because of rounding.
The $130 billion that would be authorized for overseas
contingency operations--primarily for military operations in
Iraq and Afghanistan--represents a decrease of about $14
billion (roughly 10 percent) compared to the amount currently
appropriated for 2009 for those operations. The decreases are
primarily in accounts for military personnel and procurement.
The bill also contains provisions that would both increase
or decrease the cost of defense discretionary programs in
future years. Most of those provisions would affect end
strength, military compensation, health benefits, and multiyear
procurement authorities.
The estimated costs of those provisions are shown in Table
3 and discussed below. The following discussion does not
address the timing of outlays from those estimated
authorizations.
Force Structure. The bill would affect force structure by
setting end-strength levels for the various military services.
Title IV would authorize active and reserve end-strength
levels for 2010 and would set the minimum end-strength
authorization in permanent law.
Under title IV, the authorized end strengths in 2010 for
active-duty personnel and personnel in the selected reserves
would total about 1,410,000 and 855,000, respectively. Of those
selected reservists, about 78,900 would serve on active duty in
support of the reserves. In total, active-duty end strength
would increase by about 40,200 and selected-reserve end
strength would increase by about 6,400 when compared with
levels authorized in 2009.
Also, this title would allow DoD to temporarily increase
end strength for active-duty personnel in the Army by 30,000 in
fiscal years 2011 and 2012 above the level authorized in this
bill for 2010.
Active-Duty End Strength. Section 401 would authorize
15,000 additional active-duty personnel for the Army, 8,100
additional active-duty personnel for the Marine Corps, about
2,500 additional active-duty personnel for the Navy, and about
14,700 additional active-duty personnel for the Air Force--
which CBO estimates would increase costs to DoD by $31 billion
over the 2010-2014 period. Those costs include the pay and
benefits of the additional personnel, as well as costs for
operation and maintenance. Costs for procurement and
construction are included for the cost of additional personnel
in both the Army and Marine Corps to support adding and
reorganizing units as part of the Grow the Force initiative.
Army Temporary 30,000 Increase. Section 403 would allow the
Secretary of Defense to temporarily increase the Army's active-
duty end strength by 30,000 in 2011 and 2012 compared with the
level authorized in section 401 for 2010. CBO estimates that
the temporary increase in end strength for the Army would raise
costs for salaries and other expenses by roughly $2 billion in
2011, $4 billion in 2012, and $2 billion in 2013.
Reserve Component End Strengths. Sections 411 and 412 would
authorize the end strengths for the reserve components,
including those who serve on active duty in support of the
reserves. Under this bill, the selected reserve would
experience a net increase in end strength of about 6,400, with
the Navy Reserve and Air National Guard losing personnel while
the Army National Guard and Air Force Reserve would see an
increase. On net, the number of full-time reservists who serve
on active duty in support of the reserves would increase by
about 170. CBO estimates that the net result of implementing
those provisions would be an increase in costs for salaries and
other expenses for selected reservists of $571 million in 2010
and about $2 billion over the 2010-2014 period, compared with
the authorized end-strength levels for 2009.
Reserve Technicians End Strengths. In addition, section 413
would authorize the minimum end-strength levels for dual-status
military technicians, who are federal civilian personnel
required to maintain membership in a selected reserve component
as a condition of their employment. Under this bill, the
required number of technicians would increase on net by 275
relative to the levels currently authorized. CBO estimates the
costs in civilian salaries and expenses that would result from
additional military technicians would total about $120 million
over the 2010-2014 period, compared with the minimum end-
strength levels for technicians in 2009.
Coast Guard Reserve End Strengths. The bill also would
authorize an end-strength level of 10,000 servicemembers in
2010 for the Coast Guard Reserve. Because this authorization is
the same as that under current law, CBO does not estimate any
additional costs for this provision.
Compensation and Benefits. H.R. 2647 contains several
provisions that would affect military compensation and benefits
for uniformed personnel. The bill would specifically authorize
regular appropriations of $135.7 billion for the costs of
military pay and allowances in 2010. For related costs due to
overseas contingency operations (primarily in Iraq and
Afghanistan), the bill would authorize an additional $13.6
billion for 2010.
Pay Raises. Section 601 would raise basic pay for all
individuals in the uniformed services by 3.4 percent, effective
January 1, 2010. CBO estimates the total cost of a 3.4 percent
military pay raise would be about $2.4 billion in 2010.
Compared with current law (under which CBO estimates the
across-the-board increase that will go into effect on January 1
will be 2.9 percent), this section would increase the pay raise
in 2010 by an additional 0.5 percent. CBO estimates the
incremental cost of this larger raise would be about $350
million in 2010 and $2.3 billion over the 2010-2014 period.
TABLE 2.--SPECIFIED AUTHORIZATIONS IN H.R. 2647
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars 2010--
-----------------------------------------------------------------
2010 2011 2012 2013 2014 2010-2014
----------------------------------------------------------------------------------------------------------------
Authorization of Regular Appropriations--
Department of Defense:
Military Personnel\a\
Authorization Level.................. 135,723 0 0 0 0 135,723
Estimated Outlays..................... 129,480 5,700 68 14 0 135,262
Operation and Maintenance:
Authorization Level................... 185,571 0 0 0 0 185,571
Estimated Outlays..................... 134,159 38,599 8,480 2,089 844 184,171
Procurement:
Authorization Level................... 106,759 0 0 0 0 106,759
Estimated Outlays..................... 28,084 38,970 22,735 8,763 3,498 102,050
Research and Development:
Authorization Level................... 79,654 0 0 0 0 79,654
Estimated Outlays..................... 43,499 28,670 4,903 1,172 362 78,606
Military Construction and Family Housing:
Authorization Level................... 23,261 0 0 0 0 23,261
Estimated Outlays..................... 4,375 8,660 5,818 2,465 1,035 22,352
Revolving Funds:
Authorization Level................... 3,158 0 0 0 0 3,158
Estimated Outlays..................... 2,415 467 147 86 43 3,158
General Transfer Authority:
Authorization Level................... 0 0 0 0 0 0
Estimated Outlays..................... 700 -150 -300 -150 -50 50
-----------------------------------------------------------------
Subtotal Department of Defense:
Authorization Level............... 534,126 0 0 0 0 534,126
Estimated Outlays................. 342,712 120,916 41,851 14,439 5,732 525,650
Atomic Energy Defense Activities:
Authorization Level\b\................ 16,507 0 0 0 0 16,507
Estimated Outlays..................... 11,151 4,327 1,029 0 0 16,507
Other Programs:
Authorization Level\c\................ 329 5 5 5 5 347
Estimated Outlays..................... 266 55 17 5 5 347
-----------------------------------------------------------------
Subtotal, Authorization of Regular
Appropriations:
Authorization Level............... 550,962 5 5 5 5 550,980
Estimated Outlays................. 354,129 125,298 42,897 14,444 5,737 542,505
Authorization of Appropriations for Overseas
Contingency Operations:
Military Personnel:
Authorization Level................... 13,586 0 0 0 0 13,586
Estimated Outlays..................... 12,892 650 7 2 0 13,551
Operation and Maintenance:
Authorization Level................... 89,785 0 0 0 0 89,785
Estimated Outlays..................... 48,839 29,964 7,571 1,953 668 88,995
Procurement:
Authorization Level................... 24,416 0 0 0 0 24,416
Estimated Outlays..................... 4,225 10,932 6,194 1,903 573 23,827
Research and Development:
Authorization Level................... 410 0 0 0 0 410
Estimated Outlays..................... 211 156 28 6 2 403
Military Construction:
Authorization Level................... 1,405 0 0 0 0 1,405
Estimated Outlays..................... 145 567 436 145 61 1,354
Working Capital Funds:
Authorization Level................... 397 0 0 0 0 397
Estimated Outlays..................... 149 189 47 9 3 397
Special Transfer Authority:
Authorization Level................... 0 0 0 0 0 0
Estimated Outlays..................... 140 -40 -40 -32 -24 4
-----------------------------------------------------------------
Subtotal, Iraq and Afghanistan:
Authorization Level............... 130,000 0 0 0 0 130,000
Estimated Outlays................. 66,601 42,418 14,243 3,986 1,283 128,531
-----------------------------------------------------------------
Total Specified Authorizations:
Authorization Level................... 680,962 5 5 5 5 680,980
Estimated Outlays..................... 420,730 167,716 57,140 18,430 7,020 671,036
----------------------------------------------------------------------------------------------------------------
Notes: This table summarizes the authorizations of appropriations explicitly stated in the bill--in specified
amounts. Various provisions of the bill also would authorize activities and provide authorities that would
result in additional costs in 2011 and in future years. Because the bill would not specifically authorize
appropriations to cover those costs (other than for the Sikes Act, as discussed below), they are not reflected
in this table. Rather, Table 3 contains the estimated costs of a select number of those provisions.
Numbers may not add to totals because of rounding.
a. For purposes of this estimate, CBO assumes that the authorization of appropriation in section 421 for
military personnel includes $10.7 billion for accrual payments for the TRICARE For Life program.
b. This authorization is primarily for atomic energy activities within the Department of Energy.
c. These authorizations are for the Maritime Administration ($168 million), the Armed Forces Retirement Home
($134 million), the Naval Petroleum Reserves ($23.6 million), and the Sikes Act ($4.5 million annually). The
authorized level for the Maritime Administration does not include the amounts specified in the bill for
maritime loan guarantees or payments to shipping companies under the maritime security program because those
programs are authorized for 2010 by existing statute.
Expiring Bonuses and Allowances. Sections 611 through 616
and 662 would extend DoD's authority to enter agreements to pay
certain bonuses and allowances to military personnel. Those
bonuses and allowances are scheduled to expire on December 31,
2009. The bonuses covered under sections 611 through 616 would
be extended for an additional year, and the recruitment
incentives covered under section 662 would continue for three
more years. Some bonuses are paid in lump sum, while others are
paid in annual or monthly installments over the period of
obligated service. Based on DoD's budget submission for fiscal
year 2010, CBO estimates that extending those authorities would
cost $1.7 billion in 2010 and $2.8 billion over the 2010-2014
period.
Transportation Allowances. Sections 631 and 634 would
improve transportation benefits for certain servicemembers when
they make a permanent change of station. Under section 631
military members accompanied by dependents of driving age could
ship an additional privately owned vehicle at government
expense to or from nonforeign duty stations outside the
continental United States. Military bases in Guam, Alaska, and
Hawaii would be the primary duty stations affected by this
provision. Section 634 would increase the amount of baggage and
household goods servicemembers in grades E-5 through E-9 are
allowed to move by up to 500 pounds. Based on information from
DoD, CBO estimates that providing both those expanded benefits
would cost $50 million in 2010 and $347 million over the 2010-
2014 period.
Post-Deployment/Mobilization Respite Absence (PDMRA) Pay.
The PDMRA program was enacted on January 19, 2007, as part of
the National Defense Authorization Act for Fiscal Year 2007
(Public Law 109-364) and was fully implemented by October 1,
2007. Section 663 would authorize the Secretary of Defense to
pay current and former servicemembers up to $200 for each day
of leave earned under the PDMRA program that was not credited
because the program was not yet fully implemented.
The PDMRA program provides additional administrative leave
when a member of the armed forces deploys more frequently than
the rate specified by DoD rotation policy. Based on information
from DoD, CBO estimates that under section 663 DoD would pay
about 8,100 former and 14,000 current servicemembers $200 per
day for an average of 13 PDMRA days. Implementing this section
would cost $57 million in 2010. Because this authority would
expire after one year, there would be no costs beyond 2010.
Proration of Imminent Danger Pay. Section 618 would allow
the Secretary of Defense to prorate certain types of special
and incentive pay. Based on information from DoD, CBO expects
that DoD would use the authority to prorate imminent danger pay
starting in 2011. Under current law, DoD pays $225 per month to
servicemembers who spend any part of a month in areas
designated by DoD as qualifying for imminent danger pay. The
authority in this section would allow DoD to pay servicemembers
a prorated amount for that part of a month that members are in
the designated area. CBO estimates that about 10,300 members of
the armed forces would earn a partial month of imminent danger
pay (i.e., about 4,700 would earn half a month and 5,600 would
earn one quarter of a month, on average). Thus, CBO estimates
that implementing this section would save $21 million in 2011
and $28 million annually over the 2012-2014 period.
TABLE 3.--ESTIMATED AUTHORIZATIONS OF APPROPRIATIONS FOR SELECTED PROVISIONS IN H.R. 2647
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------
2010 2011 2012 2013 2014 2010-2014
----------------------------------------------------------------------------------------------------------------
FORCE STRUCTURE
Active-Duty End Strengths..................... 8,145 7,351 5,513 5,269 5,148 31,426
Army Temporary 30,000 Increase................ 0 2,133 4,206 2,053 0 8,392
Reserve Component End Strengths............... 571 545 198 201 206 1,721
Reserve Technicians End Strengths............. 13 26 27 27 27 120
COMPENSATION AND BENEFITS (DOD)
Pay Raises.................................... 351 481 493 503 511 2,339
Expiring Bonuses and Allowances............... 1,741 604 139 222 143 2,849
Transportation Allowances..................... 50 71 74 75 77 347
PDMRA Pay..................................... 57 0 0 0 0 57
Proration of Imminent Danger Pay.............. 0 -21 -28 -28 -28 -105
National Guard Youth Challenge Program........ 20 21 21 21 22 105
Other Military Compensation Provisions........ 22 23 33 33 34 145
DEFENSE HEALTH PROGRAM
TRICARE Prior to Activation................... 92 83 63 53 56 347
Chiropractic Care............................. 5 11 12 12 13 53
TRICARE for Grey-Area Retirees................ 10 5 0 0 0 15
Dental Care for Survivors..................... 2 2 2 2 2 10
OTHER PROVISIONS
Multiyear Procurement (F/A-18 E/F and EA-18G 2,725 2,907 2,034 0 0 7,666
Aircraft)....................................
Multiyear Procurement (DDG-51 Destroyers)..... 2,020 4,180 2,160 4,470 2,320 15,150
Wage Rates for Construction on Guam........... 2,100 2,700 2,600 2,500 300 10,200
Renewable Aviation Fuel....................... 0 0 20 80 150 250
Hybrid and Electric Vehicles.................. 30 27 24 20 16 117
School of Nursing............................. 72 15 5 6 6 104
Decontamination of Culebra.................... 0 25 0 0 0 25
----------------------------------------------------------------------------------------------------------------
Notes: For every item in this table, the 2010 levels are assumed to be included in amounts specifically
authorized to be appropriated by the bill (and reflected in Tables 1 and 2). Amounts shown in this table for
2011 through 2014 are not included in Tables 1 or 2 because authorizations for those amounts would be covered
by specific authorizations in future years.
Figures shown here may not add to numbers in the text because of rounding; PDMRA = Post-Deployment/Mobilization
Respite Absence.
National Guard Youth Challenge Program. Section 593 would
authorize DoD to pay a larger share of the cost to operate the
National Guard Youth Challenge Program, raising the maximum
from 60 percent to 75 percent of the costs. CBO estimates that
this change would cost $20 million in 2010 and $105 million
over the 2010-2014 period.
Other Military Compensation Provisions. CBO estimates that
other provisions in titles V and VI would increase DoD military
compensation costs by $145 million over the 2010-2014 period.
Those other provisions would:
Extend stabilization pay to officers who are
reassigned to lower grades. Stabilization pay allows
servicemembers to retain their existing level of pay when they
change military fields and are reassigned to a lower-paying
rank.
Provide a monthly allowance for members with
catastrophic injuries or illnesses that are combat related, to
defray the cost of either a medical or personal attendant.
Limit the collection of overpayments of pay and
allowances paid in error to servicemembers.
Extend for two years the expiring authority for a
member of the armed forces to accumulate and carry over an
additional 15 days of leave earned above the otherwise maximum
statutory limit of 60.
Increase the number of students who may
participate in the Health Professionals Scholarship Program and
reserve up to 300 scholarships for students in degree programs
for mental health care.
Grant permanent authority for the Secretary of
Defense to allow children of members of foreign militaries to
attend, tuition free, the schools in Mons, Belgium operated by
the Defense Dependents' Education System.
Defense Health Program. Title VII contains several
provisions that would affect the health care benefits provided
by DoD.
TRICARE Prior to Activation. Section 706 would allow
reserve component members and their dependents to receive the
same TRICARE benefits as active-duty members for up to 180 days
prior to being called-up for active service. Currently, such
coverage is limited to 90 days. (Once a reserve member starts
his active service, he receives the same pay and benefits as
regular active-duty members.) Based on current reserve
activation statistics, CBO estimates that in the first full
year about 100,000 reserve component members could benefit from
the extra 90 days of TRICARE coverage. An analysis of reserve
component survey data indicates that many of those reserve
members have access to other health insurance. Based on this
information, CBO estimates that only about two-thirds of them
would actively use the benefit.
Based on cost data from current TRICARE programs, CBO
estimates the cost to provide an additional 90 days of TRICARE
benefits would be, on average, about $2,000 for each
participating reserve component member. After accounting for
the time needed to issue new regulations, CBO estimates this
expanded authority would cost about $92 million in 2010. Annual
costs would decrease over time because CBO assumes the number
of activated reserve members will eventually decline. In total,
CBO estimates section 706 would cost $347 million over the
2010-2014 period.
Chiropractic Care. Section 702 would require DoD to provide
chiropractic services to all current active-duty members.
Currently, chiropractic care is only available to active-duty
members at 60 military treatment facilities (MTFs). Based on an
analysis of current military base population reports, CBO
estimates that about 900,000, or roughly two-thirds, of the 1.4
million active-duty members are currently able to receive
chiropractic services.
To estimate the cost of providing care to the rest of the
active-duty population, CBO used information from the final
report of DoD's chiropractic health care demonstration program,
which took place between 1995 and 1999 (Birch and Davis
Associates, Inc., 2000). Based on that information, with
adjustments for both inflation and expected savings from
reduced usage of other forms of health care, CBO estimates that
extending chiropractic care to the remainder of the active-duty
population would result in 160,000 additional visits to
chiropractors each year, at a net cost of about $55 per visit,
or about $9 million per year.
Section 702 also would authorize a demonstration program to
provide chiropractic care to deployed forces. CBO estimates
such a program would cost about $12 million over a five-year
period, based on cost data from previous DoD chiropractic
demonstration programs. In total, CBO estimates that section
702 would cost $53 million over the 2010-2014 period.
TRICARE for Grey-Area Retirees. Section 704 would establish
a new TRICARE program for reserve component members who have
completed 20 years of service but have not yet reached the age
of 60 (so called ``grey-area'' retirees). The program would
offer benefits and cost sharing similar to that offered as part
of the TRICARE Standard health plan. However, to participate in
the program beneficiaries would be required to pay premiums
equal to the cost of the services provided. Because the
collection of those premiums is supposed to offset the added
costs to DoD, CBO estimates the net cost to the government of
this new program should be insignificant over the long-run. DoD
would incur some start-up costs related to outreach and changes
to personnel databases. CBO estimates those costs would total
about $15 million over the 2010-2011 period, based on start-up
costs from the TRICARE Reserve Select Program.
Dental Care for Survivors. Section 703 would extend TRICARE
dental benefits to the survivors of members who die on active
duty until they reach the age of 21, or, if they are still
enrolled in college, age 23. Currently, dental benefits for
survivors cease three years after the death of the sponsor.
Based on DoD casualty statistics, demographic information, and
budget data, CBO estimates this section would allow about 7,000
additional survivors to receive dental benefits through the
TRICARE program each year, at an annual cost of about $300 per
person. In total, CBO estimates this extended benefit would
cost $2 million per year.
Multiyear Procurement. Multiyear procurement is a special
contracting method authorized in title 10, United States Code,
section 2306b, that permits the government to enter into
contracts covering acquisitions for more than one year but not
more than five years, even though the total funds required for
every year are not appropriated at the time the contracts are
awarded. As part of such a contract, the government commits to
purchase all items specified at the time the contract is
signed, including those to be produced and paid for in
subsequent years. Because multiyear procurement allows a
contractor to plan for more efficient production, such a
contract can reduce the cost of an acquisition compared with
the cost of buying the items through a series of annual
procurement contracts.
Such contracts frequently include provisions that require
DoD to pay for unrecovered fixed costs in the event that the
contract is canceled before completion. DoD does not budget
for, obtain, or obligate funds sufficient to pay for those
contractual commitments at the time they are incurred.
Authorizing DoD to initiate a multiyear procurement program
with such unfunded cancellation liabilities provides contract
authority--a form of budget authority--because it allows the
department to incur that liability in advance of
appropriations. CBO believes that the full cost of such
liabilities should be recorded in the budget at the time they
are incurred. The failure to request funding for cancellation
liabilities may distort the resource allocation process by
understating the cost of decisions made for the budget year and
may require a future Congress to pay for decisions made today.
Section 124 would authorize the Department of the Navy to
enter into a multiyear procurement contract for F/A-18 E/F
fighter/attack aircraft and EA-18G electronic attack aircraft.
The department has not requested multiyear procurement
authority, and its acquisition plans for those aircraft are
unclear after 2010. The President's budget includes a request
for funding for nine F/A-18 E/Fs and 22 EA-18Gs for 2010, but
does not provide information on procurement plans in subsequent
years. In the 2009 budget, DoD planned to purchase a total of
89 of those two aircraft models over the 2010-2012 period. If
the department enters a multiyear procurement contract to
purchase 31 aircraft in 2010 and another 58 aircraft over the
2011-2012 period, costs would total $7.7 billion, CBO
estimates. Because the Navy procured F/A-18 E/F aircraft under
two previous multiyear contracts, CBO estimates that new
cancellation liabilities for a third such contract would likely
be small.
Section 125 would authorize the Department of the Navy to
enter into a multiyear procurement contract for DDG-51 Arleigh
Burke-class destroyers. In place of continuing procurement of
DDG 1000 class ships, the Department has requested funds for
restarting DDG-51 production in 2010 (The Navy last purchased a
DDG-51 ship in 2005). Based on information from the Defense
Department, CBO estimates that the Navy would purchase a total
of seven DDG-51 ships over the 2010-2014 period. CBO estimates
that if the department used the authority in this section, it
would enter a contract to acquire those seven ships at a total
cost of about $15.2 billion.
Wage Rates for Construction on Guam. DoD is realigning U.S.
forces from Okinawa and the Japanese mainland to Guam, a
process that will increase the number of active duty personnel
on the island to about 19,000 from a current level of 6,400 and
the number of military family members to about 19,000 from
7,700. That growth in population will require the construction
of over $10 billion worth of new facilities, family housing
units, and utilities infrastructure, according to DoD. Section
2833 would require construction firms that get contracts for
those projects to pay their workers wages consistent with the
labor rates in Hawaii. According to data from the Joint Guam
Program Office, wage rates in Hawaii are about 250 percent
higher than wage rates on Guam. Because labor costs account for
about 40 percent of project costs, increasing wage rates as
required by section 2833 would double the cost of completing
the construction projects necessary for the realignment of
forces.
The costs of realigning forces to Guam are being shared by
the U.S. and Japanese governments; DoD will contribute $4.2
billion, the Japanese will contribute $2.8 billion, and arrange
for third parties to finance $3.2 billion worth of family
housing construction and utility system improvements. Although
the cost of all projects would increase, CBO does not expect
that the Japanese government would increase its share; thus,
the U.S. government would need to provide the additional funds
necessary to complete construction. The growth in labor costs
that would result from enacting section 2833 would increase the
need for discretionary appropriations by about $10 billion over
the 2010-2014 period, CBO estimates.
Renewable Aviation Fuel. Under section 334, DoD would
establish a goal to procure from renewable sources, at least 25
percent of the aviation fuel it consumes in the continental
United States. (Renewable fuels are produced from plant or
animal matter, or from gas emitted from landfills, sewage, or
decaying organic matter.) On the basis of its current
consumption of aviation fuel, the department would need to
procure 12 million barrels of renewable fuel each year to
achieve that goal. It would take several years to select a
source for such fuel and to conduct the testing necessary to
confirm that such fuel would be suitable for use in military
aircraft. Thus, CBO assumes that the department would begin
purchasing small amounts of renewable aviation fuel in 2012,
increasing the amount purchased each year by about a million
barrels, until it meets the goal of an estimated 12 million
barrels purchased annually by 2025.
Although federal subsidies reduce their price, renewable
fuels are more expensive than conventional petroleum products.
Biodiesel prices averaged 55 cents more per gallon than
conventional diesel over the 2006-2008 period. However, that
difference includes the federal biodiesel tax credit and other
subsidies that effectively reduce the price of biodiesel by
$1.00 per gallon. Because the federal government cannot benefit
from the value of federal tax subsidies, the additional cost
for biodiesel for government use over that period would have
averaged $1.55 more per gallon than regular diesel--a 50
percent premium. CBO assumes that DoD would pay a similar
premium for renewable aviation fuel compared to the cost of
conventional jet fuel.
CBO estimates that DoD would procure a total of 4.5 million
barrels of aviation fuel from renewable sources over the 2012-
2014 period, at an average of $55 more per barrel, increasing
expenditures on fuel by $250 million. If DoD achieves the goal
of procuring 25 percent of domestically consumed jet fuel from
renewable source by 2025, it would expend about $900 million
more per year for fuel than if it relied solely on conventional
jet fuel, CBO estimates.
Hybrid and Electric Vehicles. Under section 2842, DoD would
increase its procurement or lease of electric or hybrid
vehicles to the extent that such vehicles meet the department's
needs and are reasonably comparable in cost to vehicles with
internal combustion engines over the life of the vehicles. CBO
assumes that 25 percent of the vehicles the department acquires
in 2010 and after would be electric or hybrid vehicles.
According to information from GSA, the federal government
replaces its vehicle fleet on a 10-year cycle. The Department
of Defense owns and leases a total of about 190,000 vehicles,
and replaces roughly 19,000 of those vehicles each year. Hybrid
vehicles cost about $7,000 more than a conventional vehicle of
similar size. If 25 percent of the vehicles replaced each year
were hybrid or electric, acquisition costs would increase by
about $33 million annually compared to the cost of procuring a
fleet of all conventional vehicles. The department would begin
to realize some savings in fuel costs as hybrid vehicles were
fielded, but initially those savings would be minimal because
of the small number of hybrids and electric vehicles in the
fleet. Over the 2010-2014 period, vehicle acquisition and
operation costs would increase by $117 million.
School of Nursing. Section 933 would establish a bachelor's
degree program in nursing at the Uniformed Services University
(USU). The school would be required to have 25 or more nurses
in its first graduating class, 50 or more nurses in the second
graduating class, and 100 or more in each subsequent class. DoD
reports that USU does not have the facilities necessary to
house the nursing program. CBO estimates that construction of a
nursing facility would cost $84 million. In addition, CBO
estimates the cost to run the program over the 2010-2014 period
would total $20 million for faculty salaries, administrative
costs, and other expenses. In total, section 933 would cost $72
million in 2010 and $104 million over the 2010-2014 period.
Decontamination of Culebra. Section 2815 would repeal a
provision in the Military Construction Authorization Act, 1974,
that prohibits the use of the former naval bombardment range on
Culebra, Puerto Rico, for any purpose that would require
decontamination and removal of expended ordnance. Lifting that
prohibition would allow the Army Corps of Engineers to clean up
the area at a cost of $25 million over the 2010-2014 period,
assuming appropriation of the necessary amounts.
DIRECT SPENDING
While several provisions in H.R. 2647 would affect direct
spending, CBO estimates that, on net, that effect would be
insignificant over the 2010-2014 period and the 2010-2019
period.
Shift of Military Retirement Payments. Section 422 would
repeal section 1002 of the Duncan Hunter National Defense
Authorization Act for Fiscal Year 2009 (Public Law 110-417),
which shifted 1 percent of military retirement payments from
September 2013 to October 2013. Based on the amounts of current
outlays for military retirement annuities, and taking into
account expected inflation and changes in the number of
retirees, CBO estimates that repeal of section 1002 would shift
$43 million in outlays from fiscal year 2014 to fiscal year
2013.
Stockpile Sales. Section 1412 would extend by two years the
period to sell cobalt from the National Defense Stockpile as
previously authorized in the National Defense Authorization Act
for Fiscal Year 1998 (Public Law 105-85 and most recently
revised by Public Law 110-417). That authority is set to expire
on September 30, 2009, and CBO expects that all remaining
cobalt will be sold by that date. Thus, CBO estimates that no
additional receipts would be achieved by extending the sales
through fiscal year 2011.
Other Provisions. The following provisions would have an
insignificant effect on direct spending, primarily because they
would affect few individuals or because they authorize both the
collection and spending of funds so that the net budgetary
impact would be quite small.
Section 503 would forbid any time spent by a
member in the Seaman to Admiral program from counting towards
the 20 years of service needed to earn a military retirement.
Section 532 would increase the number of private-
sector civilians who may attend the National Defense
University. The university has the authority to collect and
spend any tuition it receives.
Section 641 would allow reserve retirees to have
their annuities recalculated for any additional time served in
an active status after the age of 60.
Section 642 would allow certain active-duty
members who are eligible for retirement and who join the
selected reserves to have their retirement annuities
recalculated at age 60.
Section 704 would allow the Secretary of Defense
to collect and spend premiums as part of a new health benefit
for certain former members who are eligible for a reserve
retirement.
Section 904 would allow certain private-sector
employees to attend the Defense Cyber Investigations Training
Academy. Under this section, the Secretary of Defense would
charge those students tuition and then retain and spend those
funds.
Section 912 would make permanent a pilot program
that allows DoD to provide satellite tracking services to non-
U.S. government entities. Under this program DoD is allowed to
charge fees to cover the costs of providing such services and
to spend such fees.
Section 1303 would allow DoD to accept
contributions from the private sector and foreign governments
for use on activities associated with the Cooperative Threat
Reduction program. Spending of amounts contributed would be
subject to appropriations. The authority to accept
contributions would expire on December 31, 2012. Any amounts
not spent by December 31, 2015 would be returned to the donor.
Section 2817 would authorize the Secretary of the
Air Force to accept contributions from public and private
entities to demolish facilities on the former Almaden Air Force
Station in California and to restore that property to a natural
state. Spending of contributions would be subject to
appropriation. CBO estimates that the collections from such
authority would not be significant.
Section 3502 would increase outlays by authorizing
the Maritime Administration to make lump-sum payments for
unused leave to certain former employees of the U.S. Merchant
Marine Academy.
Intergovernmental and private-sector impact H.R. 2647
contains both intergovernmental and private-sector mandates as
defined in UMRA. CBO estimates that the costs of the
intergovernmental mandates would not exceed the threshold
established in UMRA ($69 million in 2009, adjusted annually for
inflation). CBO cannot determine whether the costs to the
private sector would exceed the annual threshold ($139 million
in 2009, adjusted annually for inflation).
INCREASING THE END STRENGTH OF ACTIVE DUTY FORCES AND EXPANDING
PROTECTIONS UNDER SCRA
Sections 401, 403, and 412 would increase the costs of
complying with existing intergovernmental and private-sector
mandates by increasing the number of service members and
reservists on active duty. Specifically, the number of active-
duty service members would increase by more than 40,000 in
fiscal year 2010, with an additional increase of 30,000 for the
army in fiscal years 2011 and 2012 combined.
Those additional service members would be eligible for
existing protections under the Servicemembers Civil Relief Act
(SCRA). SCRA includes the right to maintain a single state of
residence for purposes of state and local personal income taxes
and the right to request a deferral in the payment of certain
state and local taxes and fees.
SCRA also requires creditors to reduce the interest rate on
servicemembers' loan obligations to 6 percent when the
acquisition of such obligations predate active-duty service,
allows courts to temporarily stay certain civil proceedings,
such as evictions, foreclosures, and repossessions, and
precludes the use of a servicemember's personal assets to
satisfy the member's trade or business liability while he or
she is in military service. Also, section 582 would include
additional service contracts, such as those for multichannel
video programming and Internet access, in the SCRA provision
that allows servicemembers who receive deployment or permanent
change-of-station orders to cancel or suspend contracts without
incurring early-termination fees.
Extending these existing and proposed protections would
impose mandates and could result in lost revenues to government
and private-sector entities. CBO estimates that the net impact
of the residency provisions on the collection of state and
local government income taxes would be small, with some
additional costs associated with delayed collections. Because
public utilities and other public entities that would be
affected by the bill's limitation on fees rarely impose such
fees, the costs of those provisions also would be small.
CBO does not have sufficient information to estimate
precisely the increased costs on the private sector of
complying with the provisions in SCRA. Servicemembers'
utilization of the various provisions of the SCRA depends on a
number of uncertain factors, including how often and how long
they are deployed. While some of the SCRA protections might
affect a greater number of servicemembers, the cost per person
could be relatively small. On the other hand, other SCRA
protections could have relatively high per-person costs even
though they affect a small number of servicemembers. Because
the proposed increase in authorized active-duty and reserve end
strength is relatively larger than the increases in recent
years, CBO cannot determine whether the costs to the private
sector would exceed the annual threshold.
CHANGES TO THE FAMILY MEDICAL LEAVE ACT
Section 585 would amend provisions of the Family and
Medical Leave Act (FMLA) to extend employment benefits of that
act to certain service members and veterans. Because
governmental and private-sector employers are required to
comply with FMLA, the provision would impose both
intergovernmental and private-sector mandates. CBO estimates
that the costs of those mandates would fall below the annual
thresholds established in UMRA.
PREEMPTION OF STATE LAW
Section 584 would expand existing protections for
servicemembers related to child custody proceedings by
prohibiting courts from changing custody orders while a
servicemember is deployed and from considering a
servicemember's deployment in determining the best interests of
the child. CBO estimates the cost of complying with this
mandate would be small.
PROVIDING BENEFITS TO STATE AND LOCAL GOVERNMENTS
The bill contains several provisions that would benefit
state and local governments. Some of those provisions would
authorize aid for certain local schools that serve dependents
of defense personnel. Any costs to those governments would be
incurred voluntarily as a condition of receiving federal
assistance.
Estimate prepared by: Federal Costs: Defense Outlays--Kent
Christensen; Military Construction and Multiyear Procurement--
David Newman; Military and Civilian Personnel--Dawn Regan;
Military Retirement and Health Care--Matthew Schmit; Operation
and Maintenance--Jason Wheelock; Nursing Education--Camille
Woodland; Ship Acquisition and Stockpile Sales--Raymond J.
Hall; Impact on State, Local, and Tribal Governments: Burke
Doherty; Impact on the Private Sector: Elizabeth Bass.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
COMMUNICATIONS FROM OTHER COMMITTEES
This exchange of letters was inadvertently omitted in Part
I of House Report 111-166. The committee appreciates the
cooperation and effort which the Committee on Small Business
dedicated to ensuring that the National Defense Authorization
Act for Fiscal Year 2010 moved expeditiously through the
legislative process.
House of Representatives,
Committee on Small Business,
Washington, DC, June 18, 2009.
Hon. Ike Skelton,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: I am writing you concerning the bill,
H.R. 2647, the National Defense Authorization Act for Fiscal
Year 2010. There are certain provisions, including Sections 801
and 814, in the legislation that fall within the Rule X
jurisdiction of the House Small Business Committee.
I am willing to waive this committee's right to sequential
referral on the bill. I do so with the understanding that by
waiving consideration of the bill the Small Business Committee
does not waive any future jurisdictional claim over the subject
matters contained in the bill which fall within its Rule X
jurisdiction. I request that you urge the Speaker to name
members of this committee to any conference committee which is
named to consider such provisions.
Please place this letter into the committee report on H.R.
2647 and into the Congressional Record during consideration of
the measure on the House floor. Thank you for the cooperative
spirit in which you have worked regarding this matter and
others between our respective committees.
Sincerely,
Nydia M. Velazquez,
Chairwoman.
------
House of Representatives,
Committee on Armed Services,
Washington, DC, June 22, 2009.
Hon. Nydia M. Velazquez,
Chairwoman, Committee on Small Business,
House of Representatives, Washington, DC.
Dear Madam Chairwoman: Thank you for your letter regarding
H.R. 2647, the National Defense Authorization Act for Fiscal
Year 2010. I agree that the Committee on Small Business has
valid jurisdictional claims to certain provisions in this
important legislation, and I am most appreciative of your
decision not to schedule a mark-up of this bill in the interest
of expediting consideration. I agree that by agreeing to waive
consideration of certain provisions of the bill, the Committee
on Small Business is not waiving its jurisdiction over these
matters.
This exchange of letters will be included in the committee
report on the bill.
Very truly yours,
Ike Skelton,
Chairman.
COMPLIANCE WITH HOUSE RULE XXI (CORRECTION)
Pursuant to clause 9 of rule XXI of the Rules of the House
of Representatives, the committee is required to include a list
of congressional earmarks, limited tax benefits, or limited
tariff benefits, as defined in clause 9 of rule XXI of the
Rules of the House of Representatives, which are in the bill or
the report.
The following supplemental list contains a line omitted
from the list contained in part 1 of the committee report (H.
Rept. 111-166) accompanying the National Defense Authorization
Act for Fiscal Year 2010 due to inadvertent clerical oversight.
This is not a new program and it was included in part 1 of the
committee report. That disclosure failed to include all members
who requested the program and the omission is corrected in the
following table.
Additionally, the original report attributed the Wave
Energy PowerBuoy Generating System program to Representative
Kurt Schrader (OR). This item was not requested by
Representative Schrader and was inadvertently attributed to him
in part 1 of the committee report.
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